Archive for December, 2011
Investors from Asia are taking advantage of housing prices that have plummeted in recent years, buying foreclosures and short sales at below what it would cost to build them.
Kevin Chu's Hong-Kong investment firm owns property in Las Vegas, but he's never seen any of it. So his first visit to the U.S. is to inspect the houses in Las Vegas.
In the past 18 months, the firm he works for, The Creations Group, bought up distressed homes all over the U.S. — including 13 Las Vegas houses at fire sale prices.
Bank of America might need to raise $45 billion by 2019 to de-risk its balance sheet, with vulnerability largely in the residential real estate sector, one “Fast Money” analyst said Tuesday.
“The real risk really comes from the overhang we get from Countrywide,” said Marty Mosby, managing director at Guggenheim Securities.
Bank of America (BAC: 7.2207 -1.09%) and The Bank of New York Mellon (BK: 20.08 +0.40%) may still get the court venue of their choice as the firms fight investors over an $8.5 billion residential mortgage-backed securities settlement.
The U.S. Court of Appeals for the 2nd Circuit upheld Bank of America's motion to appeal a lower court decision that denied the banks' their motion to move the litigation to state court from federal court.
The case in question was originally filed by investors of soured Countrywide Financial mortgages and MBS.
The investors continue to oppose the settlement reached last summer between Bank of New York Mellon, which was trustee of the securitized loans, and the originator Countrywide, which is now owned by Bank of America.
After the investors sued to retain their rights, they moved their case from state court to federal court, claiming class-action status qualified them for federal jurisdiction.
Bank of New York Mellon and BofA motioned to get the case back into state court. At the time, analysts called the move strategic since BNY Mellon was trying to ensure New York state Article 77 applied to the resolution of the case. Manal Mehta with Branch Hill Capital said in October that BNY Mellon and BofA desired state jurisdiction because the state statute can make the settlement binding on all of the investors suing BofA and BNY Mellon.
In October, a U.S. District Court Judge for the Southern District of New York upheld the investors' push for federal jurisdiction, saying the case touched on key federal issues.
But the decision from the 2nd Circuit revived BofA and BNY Mellons' fight for state jurisdiction. The 2nd Circuit said on appeal that it will hear arguments on three key issues: whether the case was in fact removable under the Class Action Fairness Act of 2005; whether the case is a securities exception to the Act; and whether the case was properly removed by the defendants.
Write to Kerri Panchuk.
Foreclosure posting activity on commercial properties in Dallas-Fort Worth fell 14% from its peak in 2010, according to Foreclosure Listing Service Inc.
The agency, which studies foreclosure activity in the Dallas-Fort Worth metro area, said it’s the first time in six years the region has experienced a drop in commercial foreclosure listings.
"For 2011, postings filed threatening DFW commercial properties with foreclosure dropped to 2,860 from 3,313 notices during the previous year, which appears to have been the peak, at least so far, for commercial posting activity in this foreclosure cycle," said George Roddy, president of Foreclosure Listing Service Inc. He added, "Commercial foreclosure posting activity among all four counties within the DFW Metro declined over the past year." (Click on chart to expand.)
Not all foreclosure postings move through the entire default cycle, Roddy said. Of all the commercial foreclosure postings filed each year, about 25% to 40% actually end up in auction, he added.
Year-over-year, industrial properties were the only commercial buildings in DFW to experience an increase in foreclosure postings, with this segment's filings jumping 20% from 2010. Industrial properties had 303 foreclosure postings filed in 2011, compared to 252 last year.
Foreclosure postings on apartment communities fell 30% from 2010. Office buildings and retail centers also had fewer filings, with the number of filings in those segments dropping 6% and 12%, respectively, from last year.
Commercial foreclosure postings declined 29% in Collin and Denton counties, while Tarrant and Dallas counties experienced 13% and 5% drops, respectively.
Write to Kerri Panchuk.
